The supplier prescribed by the franchisor is not performing? What now?
The Court of Appeal of ‘s-Hertogenbosch ruled on 20 February 2018, ECLI:NL:GHSHE:2018:727, on the question of who must prove that the franchisee was misled when entering into the franchise agreement.
Under the franchise agreement, the franchisee must purchase exclusively from suppliers specified by the franchisor. The franchisee states that the franchisor already had problems with two prescribed suppliers at the time, but did not communicate this to the franchisee when the franchise contract was signed. The franchisee invokes fraud and error and nullifies the concluded franchise agreement on those grounds. The franchisor disputes the alleged problems with the prescribed suppliers. The Court ruled that if the franchisor indeed had problems with the exclusive suppliers, the franchisor should have communicated this to the person who was about to become a franchisee.
The franchisee believes that the burden of proof regarding the problems with the prescribed suppliers lies with the franchisor. The Court of Appeal ruled that the franchisee invoked a lack of will and stated that there were grounds to nullify the franchise agreement. Based on the main rule, this entails that he must prove the facts on which he is based, which have been disputed by the franchisor with reasons. The franchisee therefore has the burden of proof.
It is not inconceivable that the franchisee might have had a different position of proof if the Acquisition Fraude Act had been invoked. After all, there is an explicit possibility to reverse the burden of proof if there is a sufficient suspicion of deception.
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .
Other messages
Damage estimate after wrongful termination of the franchise agreement by the franchisor
In a judgment of the Supreme Court of 15 September 2017, ECLI:NL:HR:2017:2372 (Franchisee/Coop), it was discussed that supermarket organization Coop had not complied with agreements, as a result of which the franchisee
Franchisor is obliged to extend the franchise agreement
On 6 September 2017, the Rotterdam District Court ruled, ECLI:NL:RBROT:2017:6975 (Misty / Bram Ladage), that the refusal to extend a franchise agreement by a franchisor
The (in)validity of a post-contractual non-competition clause in a franchise agreement: analogy with employment law?
On 5 September 2017, the District Court of Gelderland, ECLI:NL:RBGEL:2017:4565, rendered a judgment on, among other things, the question of whether Bruna, as a franchisor, could invoke the prohibition for a
Column Franchise+ – mr. J Sterk: “Court orders fast food chain to extend franchise agreement
The case is set to begin this year. For years, the franchisee has been refusing to sign the new franchise agreement that was offered with renewal, as it would lead to a deterioration of his legal position
Not a valid non-compete clause for franchisee
On 18 November 2016, the interim relief judge of the Central Netherlands District Court, ECLI:NL:RBMNE:2016:7754, rendered a judgment in the issue concerning whether the franchisee was held
Franchise & Law No. 5 – Acquisition Fraud and Franchising Act
The Acquisition Fraud Act came into effect on 1 July 2016. This includes amendments to Section 6:194 of the Dutch Civil Code.